Coronavirus and 2020 local budgets: Allegheny County

Coronavirus and 2020 local budgets: Allegheny County

Compared to the
City of Pittsburgh, Allegheny County has a larger operating
budget of $959.8 million. The
county property tax is budgeted to raise $382.4 million (40 percent) of total
revenues. Property taxes are deposited into the general
fund and debt service fund. The county extended
the discount and gross due dates for 2020 property taxes by one month.

The county also levies
taxes on sales, hotel and motel room rentals, alcoholic beverages and vehicle rentals
but does not retain 100 percent of the revenues for its budget purposes.

The county receives
25 percent of the 1 percent sales tax, budgeted at $52.9 million this year. The
Regional Asset District (RAD)
receives 50 percent for distribution to regional assets (money from this share
goes to the county budget for parks) and municipalities receive 25 percent. RAD’s latest monthly
budget report , reflecting February collections, noted “RAD expects
revenue to steeply decline in the coming months, due to the COVID-19 shutdown.”

The county
receives $1.3 million for collecting the hotel
tax. The bulk of the 7
percent tax pays for debt on the convention center, tourism promotion activities
and operations at the convention center and is projected to bring in $36.8
billion in 2020, an amount that will certainly decline with the decrease in
travel and tourism.

The levies on alcohol
and vehicle
rentals provide the local match for state revenue for the Port
Authority. In 2020 the 7 percent alcohol
tax is budgeted to raise $45.1 million and the $2 per day vehicle rental tax
$7.8 million. With restaurants and bars
closed, and the aforementioned decrease in travel, both will be affected. In recent years this fund ran a surplus,
which might have to be utilized this year.

Taxes collected by
retailers, hotel and motel operators, bars and vehicle rental establishments in
March are due at
various points in mid-April. Court enforced actions on delinquent taxes has
been suspended.

The most recent
year-over-year decline in these taxes occurred in 2017 when hotel and vehicle
rental tax collections decreased by $242,000 and $15,000, respectively from the
amounts collected in 2016.

The county also receives
a 2 percent share of gross terminal revenues at the Rivers Casino which goes to
the county’s general fund. The casino is closed which will affect the county’s
distribution, budgeted at $5.9 million.

Allegheny County’s
home rule
charter requires adopted budgets to be balanced and amendments after
adoption to maintain balance. The county’s unassigned fund balance (money that
has not been restricted or committed to some purpose) was $50.5 million at the
end of 2018 and may be called upon to make up for shortfalls.

The county might
receive direct dollars from the CARES Act
“Coronavirus Relief Fund” since it has a population greater than 500,000. At this week’s meeting
of council two additional grants totaling $15 million were accepted under the
Community Development Block Grant and the Housing Emergency Solutions Grant.

In 2009 as the
economic slowdown began to be felt in the area we
wrote “the one thing [local governments] should not do is to make
the local problems worse by raising taxes to fill budget gaps. If spending cuts
need to be made, they must make them.” The
county did not increase property taxes this year. With the exception of the
alcoholic beverage tax, other tax rates are at state-prescribed maximums and
cannot increase without action by the General Assembly.

As we recommended
for the city, the county should evaluate the services it carries out—it has a
regular sunset
review process that would aid significantly in this effort—to see if
privatization and outsourcing may be options to relieving a budget difficulties
in 2020.